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State Bank of India and Information Technology: An Interface
88
CHAPTER 3
STATE BANK OF INDIA AND INFORMATION TECHNOLOGY: AN INTERFACE
3.1 Introduction
In the previous chapter, e-banking in India was discussed in
detail. Various e-banking products available in India, meaning and
concept of e-banking was explained, advantages of e-banking was
discussed, advantages to customers and to the bank were highlighted.
Various e-banking services available in India and various facilities
enjoyed by the customer by using these services was also discussed. In
the end of chapter, various issues in e-banking was discussed along
with the strategic measures that are needed. The present chapter to
presents a detailed discussion about the history of one of oldest banks
in India i.e. State Bank of India. Transformation of SBI from 1955 to till
date will be discussed. Along with that, core banking solution and how
it‟s implementation in SBI has been talked about.
3.2 State Bank of India (SBI): History
Roots of State Bank of India can be found from the first decade of
19th century with the establishment of Bank of Calcutta in Calcutta on
June 2nd, 1806. Three years later, this bank was renamed as Bank of
Bengal on January 2nd, 1809. British India established this bank as their
State Bank of India and Information Technology: An Interface
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first ever joint stock bank under the sponsorship of Government of
Bengal. Subsequently Bank of Bombay and Bank of Madras were also
established on July 1st ,1840 and July 1st ,1843 followed by Bank of
Bengal. Modern banking scenario in India was dominated by these
three banks until they were later merged to form the Imperial Bank of
India on January 27, 1921. The Presidency Banks Act, which came into
operation on May 1st , 1876, brought the three presidency banks under a
common statute and the banks involved themselves in the financing of
practically every trading, manufacturing and mining activity in the sub-
continent.. These three banks have the exclusive right to issue paper
currency notes till the Paper Currency Act was passed in 1861. This
right was abolished as Government of India got the sole power of
issuing currency from March 1st , 1862.
The Presidency Banks of Bengal, Bombay and Madras with their
70 branches were merged on 27th January, 1921 to form the Imperial
Bank of India (Gupta R.P, 1994). The main purpose of Imperial bank is
to do commercial banking, bankers‟ to banks, and banker to the
government. But this creation was preceded by years of deliberations
on the need for a 'State Bank of India'. What eventually emerged was a
'half-way house' combining the functions of a commercial bank and a
quasi-central bank (www.sbi.co.in , 2012). The birth of Reserve Bank of
State Bank of India and Information Technology: An Interface
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India in 1935 as the central bank to the government reduced the central
role of Imperial Bank. The birth of Reserve Bank simultaneously saw
important amendments being made to the constitution of Imperial
Bank, converting it into a purely commercial bank. When India attained
freedom, Imperial Bank had a capital base (including reserves) of
Rs.11.85 crores, deposits and advances of Rs.275.14 crores and Rs.72.94
crores respectively and a network of 172 branches and more than 200
sub offices extending all over the country (www.sbi.co.in , 2012).
The launch of first five year plan was an important turning point
emerged for State Bank of India with primary focus on development of
rural sector. Till the first five year plan, the commercial banks of the
country, including the Imperial Bank of India, restricted their products
and services to the urban sector. Therefore, in order to reduce this
limitation and serve the economy as a whole and rural sector in
particular, the All India Rural Credit Survey Committee recommended
the formation of a state-partnered and state-sponsored bank by taking
over the Imperial Bank of India, and incorporated with it, the former
state-owned or state-associate banks (www.statebankofindia.com ,
2012).
In May 1955, an act was passed and on July 1st , 1955 State Bank
of India was created. More than 25% of the available resources by the
State Bank of India and Information Technology: An Interface
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Indian banking system was directly controlled by this newly
established bank namely State bank of India. Later in 1959, State Bank
of India (subsidiary bank) act was passed, which enables this bank to
take over eight former state associated banks as its subsidiaries. Later
these subsidiaries were named as State Bank of India associate banks.
Thus, it can be said that State Bank of India was born with a special
purpose assisted by 480 offices that includes branches, sub-offices and
three local offices that were inherited by Imperial Bank. This bank caters
to the needs of customers by banking purposefully instead of restricting
the service to mere repositories of the community‟s saving and lending
to the creditworthy parties. The seven banking subsidiaries before
merger and absorption are:
1. State Bank of Bikaner and Jaipur (SBBJ)
2. State Bank of Hyderabad (SBH)
3. State Bank of Indore (SBIR)
4. State Bank of Mysore (SBM)
5. State Bank of Patiala (SBP)
6. State Bank of Saurashtra (SBS)
7. State Bank of Travancore (SBT)
State Bank of India and Information Technology: An Interface
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In 2008, State Bank of Saurashtra was merged with State Bank of
India. Then in 2009, State Bank of India‟s board approved the
absorption of State Bank of Indore (www.Wikipedia.org , 2012),
reducing the number of associates to only five. State Bank of India at
present has following five Associate Banks .
1. State Bank of Bikaner and Jaipur (SBBJ) with State Bank holding
of 75.07 %.
2. State Bank of Hyderabad (SBH) with State Bank holding of 100%.
3. State Bank of Mysore (SBM) with State Bank holding of 92.33 %.
4. State Bank of Patiala (SBP) with State Bank holding of 100 %.
5. State Bank of Travancore (SBT) with State Bank holding of
75.01%.
SBI, a bank with 60% government stake, was India‟s largest
commercial bank and the 43rd largest bank in the world with a market
capitalization of over $36.5 billion in 2011(Lal, R. and Tahilyani ,R.
2011).
3.3 State Bank of India: Transformation From 1955 to 2013
Some of the important events that took place in the history of
State Bank of India:
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On September 1955, State Bank of India (Subsidiary Bank) act was
passed and in October 1955, State Bank of Hyderabad became the first
subsidiary of State Bank of India. In 1960, State Bank of Jaipur, State
Bank of Bikaner, State Bank of Indore , State Bank of Travancore, State
Bank of Mysore, State Bank of Patiala and State Bank of Saurashtra
became subsidiaries to State Bank of India. In October 1963, a branch of
SBI in London city became banker to Indian High Commission. Earlier,
this was done by the office of Reserve Bank of India.
Bank of Behar Ltd. was merged with State Bank of India in
November 1969.To meet the needs of corporate sector, a merchant
banking division was set up in the central office in the year 1972.
During the year 1977, State Bank of India introduced the
perennial Pension Plan Scheme through which customers can claim
monthly pensions with certain conditions. Further, in order to meet the
social and cultural needs of villages, the State Bank of India launched an
integrated rural development programme aimed at housing and social
activities apart from credit needs of agriculturist and agricultural needs
and village industries. The Non-Resident Investment Cell was setup in
the year 1982, which streamlined the working operations of the non-
resident investment sections at important centres. In the year 1983, State
Bank of India took the initiative of providing self-employment
State Bank of India and Information Technology: An Interface
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opportunities for the educated unemployed youths. These youths were
encouraged to undertake self-employment ventures in industries,
service and business.
The Bank of Cochin Ltd. with 108 branches was merged with
State Bank of India in the year 1985. In addition to that, a data bank was
setup of sick units available to be taken over by healthy units. In the
same year, all the share of Imperial Bank of India was vested in Reserve
Bank of India. State Bank of India was registered with an authorised
capital of Rupees 20 Crores. Every person who owned the share of
Imperial Bank of India on June 30th , 1955 was paid by Reserve Bank of
India.
State Bank of India in the year 1987, had sponsored 30 Regional
Rural Banks that covered backwards and unbanked district in the
country. During the year 1988, State Bank of India initiated UPTECH,
an Industrial Technology Group to direct and guide programs that
aimed at facilitating up-gradation in technology. Further, three pilot
programs schemes were launched to develop entrepreneurship among
women under the name “Stree Shakti” in the district of Chennai,
Calcutta and Hyderabad. On 20th September, bank inaugurated
“SBINET”, an integrated communication project that aimed at
improving customer service, operation efficiency and administrative
State Bank of India and Information Technology: An Interface
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convenience. With this network bank can handle voice, fax data and
manages through the trunk routes and exchanges in important centres.
In the same year, the bank sponsored 30 Regional Rural Banks (RRB‟s)
covering 66 divisions in the country. In addition to that, 76 branches
were opened that raised the total tally of branches to 2306.
In the year 1990, State Bank of India introduced agricultural
credit cards known as SBI Green Card to give farmers more liquidity
and flexibility in procuring agricultural inputs. This pilot scheme was
introduced in 125 intensive centre branches. During the year 1992, bank
sponsored 30 RRB‟s with a network of 3189 offices that covers 102
backward and unbanked districts of the country. Moreover, during the
same period NRI branches were opened that were equipped with latest
technology at Mumbai and Delhi to cater to the special needs of NRI
residents. Representative office at Tashkent as part of its overseas
expansion was established in 1993.
In 1997, State Bank of India became the first public sector bank to
introduce optical disc facilities for data storage. During the year 1998,
on January 27, bank started its foray into the payment cards business in
a joint venture agreement with General Electrical Capital Corporation (
GE Capital) . During the same year, State Bank of India signed an
agreement with Visa International for cards in the country. State Bank
State Bank of India and Information Technology: An Interface
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of India tied up with its associates to market its cards. SBI tied up with
State Bank of Patiala and State Bank of Mysore to help market its credit
cards in the year 1999. Value added services were also introduced by
SBI to its customers like credit cards can be used at ATM‟s as an ATM
card. During the year 2000, State Bank of India Bank had focused upon
the expansion of ATM network in the twin cities of Hyderabad and
Secunderabad. Further, the bank cleared the setting up of separate
subsidiary for information technology. SBI tied up with State Bank of
Mysore to launch co-branded credit cards to expand its card holder
base. In the same year, SBI launched an international credit card only
for doctors, first of its kind in the country. During the year 2001, State
Bank of India expanded its network of ATM‟s in North East , in
Bangalore and in Mumbai . In addition to that, HCL Com Net was
assigned the task to provide it ATM teller inter-connectivity during the
same year. On July 3, SBI launched SBI International Card and SBI
Global Card for global travellers. These cards would be accepted at over
20 million Visa outlets all over the world and one lakh outlets in the
country. Huge investment of Rupees 800 crores was invested in
technology up-gradation program and appointed KPMG, a consultant
in computer technology, to provide inter-connectivity to computerised
branches and also to the ATM‟s all over the country, enabling its
customers to indulge in any kind of transaction from anywhere. During
State Bank of India and Information Technology: An Interface
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the year 2002, State Bank of India introduced the up-gradation plan
with KPMG help. Two new credit card schemes were launched namely
SBI Advantage Card to banks fixed deposits customers and SBI
International Cards for its home loan customers. In a big step, moving
towards becoming a market leader, State Bank of India introduced a
new card, SBI cash plus its Maestro Debit card. This card allows its
customers to access their account from ATM‟s and merchant
establishment. Two new cards were launched by SBI namely SBI
Bangalore Card and Hyderabad Card. For providing network solutions,
MRO-TEK had secured orders from SBI to connect more than 800
branches all over the country. State Bank of India tied up with two
private banks for sharing ATM networks namely ICICI bank and HDFC
bank. In 2004, SBI initiated a concept of drive-in ATM in Hyderabad
city. ATM sharing agreements with UTI and Andhra bank was agreed
upon by SBI. A new prepaid card was introduced by SBI namely,
Vishwa Yatra foreign travel card, which offers the traveller a convenient
and secure way to carry cash. During the same, year SBI launched fully
computerised branch at Karunagappally in Kollam district. First mobile
ATM for increasing banking convenience of its customers was launched
. A new scheme specially for credit card users was launched namely
„Instant card‟ which customers can use within few hours of filling their
application form.
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In year 2005, SBI and all its 8 subsidiaries have entered into
agreement with Bharat Petroleum Corporation Ltd (BPCL) for
enhancing the usage of card at fuel stations. During the same year, SBI
enters into agreement with Punjab National Bank (PNB) and
Corporation Bank for ATM sharing. In the year 2007, number of debit
card users of State Bank of India crossed over 70 million comprising of
SBI Cash Plus, SBI Gold Debit and SBI Yuva Card. SBI added the
concept of chip and PIN- based with Platinum Debit card. SBI also
entered into pact with Unique Identification Authority of India (UIDAI)
during the same year. It became the first bank to take up registration
work for UIDAI project. During the year 2012, State Bank of India
launched virtual debit card to check online fraud and to promote more
and more e-commerce transactions.
3.4 Core Banking Solution in State Bank of India
Core Banking Solutions is a new term that is frequently heard in
banking industry. The evolution of technology especially internet and
information technology has led to new way of doing day to day
business in banking sector. Information Technology has cut down the
cost and time by working simultaneously on various issues thereby
increasing efficiency.
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Information and communication technology and information
technology are merged to suit the various needs of banking sector. This
amalgamation is known as Core Banking Solutions. A computer
software is developed to perform the daily routine work of banking like
recording of transactions, passbook maintenance, interest calculations
on loans and deposits, customer records, balance of payments and
withdrawal. Core banking solutions (CBS) software is installed at
different branch offices of the banks and then interconnected by
telephones, satellite, internet etc. CBS gives the freedom to the customer
by allowing them to operate their account from any branch if the branch
is connected via CBS. This has changed the way of working in banking
industry. CBS is networking of branches, which enables the bank and
customers to operate the account regardless of where the customer
operates the account from. After the emergence of CBS, a customer is no
more a customer of a branch. He is the customer of bank. Thus CBS is a
step towards enhancing customer convenience through Anywhere and
Anytime Banking.
3.4 .1 The application areas of Core Banking Solutions (CBS)
Computer software is developed to perform day to day operation
of banks like:
1. Balance of payments and withdrawal
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2. Recording of transactions
3. Passbook maintenance
4. Interest calculations on loans and deposits
5. Customer records
6. ATM‟s
7. Internet Banking
8. Mobile banking
3.4 .2 State Bank of India’s Core Banking Solutions’ success story
Lack of reliable source of communication and lack of
infrastructure facilities like power (specially in villages and small
towns) had put many obstacles in implementation of computerisation
of banks in India in 1970‟s and 1980‟s (Hunt, R. 2009).During 1990‟s,
when liberalisation and privatisation had taken place, the Indian
economy had seen an era of rapid growth as countries‟ competitive
labor costs and telecommunication technology allowed India to offer
commercial services at international level. The private players in
banking industry were implementing modern centralised core banking
systems that allowed them to introduce more advanced products that
provided more convenience to customers. As a result, these banking
players attracted more customers at the expense of public sector banks.
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State Bank of India is the largest and oldest bank in India.
Computerisation of its branches started in 1990‟s but the bank was still
losing its market share to private and new banking players a since those
banks had implemented more modern centralised core processing
systems. Although the computerisation improved the accuracy and
efficiency of the branches, the local implementation restricted
customers' use to their local branches and inhibited the introduction of
new banking products and centralisation of operations functions. With
new innovative products, efficiency of competitors became more and
more evident in the late 1990‟s as State Bank of India lost its existing
customers along with the new customers. Not only this but the tech-
savvy customers viewed public sector banks as technology laggards
that could not even meet their new banking needs.
The implementation of new technology helped the bank to
achieve strong profit gains into the early years of the new century. State
Bank of India also adopted new human resource and retirement policies
which helped in reducing the human resource by some 20,000, almost
entirely through voluntary retirement in a country where joblessness
remained a decided problem. To remain competitive with the private
sector and new entrant counterparts, in 2002, SBI began the largest
implementation of a centralized core system ever undertaken in
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banking industry. SBI and its seven associates in 2002 needed to have
the same technology that their counterparts were using, which meant
moving the bank from the existing platform of doing routine work to a
new platform altogether. This required training for human resource,
change in their hardware and software, data cleansing etc (Choudhry,Y.
2010). State Bank of India‟s management recommended the strategy for
a new information technology environment that includes the
installation of new centralised core banking solution.
The main objectives of modernising core banking system are as
follows:
1. Delivery of new product for all customers, including
customers in villages.
2. Similar processes across the bank to realize operational
efficiencies and improve customer service.
3. Provision of a single customer view of all accounts.
4. To merge the affiliate banks to State Bank of India.
5. Support for all SBI existing products.
6. Reduce the delivery of time for delivering a service to
customer.
7. Reversal of customer attrition trend.
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3.4 .3 Benefits of Core banking Systems
The new core system has resulted in benefits throughout the bank
for both the customers and the employees of SBI. For example, the new
core banking system allowed the bank to redesign processes. It
established 400 regional processing centres for all metro and urban
branches that assumed functions previously performed in the
individual branches. The bank recently reported that business per
employee increased by 250% over the last five years (Hunt, R. 2009).
1. To meet the intense competition and changing market
dynamics in an over banked environment.
2. To meet the regulations and compliance requirements like
Information Technology infrastructure.
3. To meet the demands of customers who are better
informed, more demanding and less loyal than ever.
4. To enhance efficiency and effectiveness.
5. Increasing customer satisfaction and convenience
6. Freeing up time for branch staff to focus on sales and
marketing
7. Simplifying process for employees.
8. Enhancing bank‟s competitiveness in the market
9. Improved process efficiency
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3.4 .4Challenges faced by State Bank of India in implementing CBS
The implementation of core banking solution was a huge task for
information technology department of SBI. It was critical to understand
the size and complexity of the CBS project in order to make it
successful. Moreover, State bank of India had more than 200000
employees. Many of them had very little or no knowledge about
information technology equipments. The challenge was to find a core
system that can process around 75 million accounts daily, a number
greater than any bank in the world. Lack of experience in centralised
system was also an issue. Another important challenge was meeting
with the unique product requirements of the bank to make extensive
modification to a new core banking solution. Product included gold
deposits , saving accounts with overdraft and an extra ordinary number
of passbook .
CBS has allowed the State Bank of India to centralise the
computer operation functions, offer new banking products to all
citizens, attract more and more customers and to consolidate its affiliate
banks. Furthermore, bank can now expand its range of product and
service offerings and improve customer service.
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3.5 Organizational Structure of State Bank of India
The Bank‟s management and organizational structure is
sufficiently decentralized allowing senior managers‟ decision making
responsibility to continuously improve.
The Central Board of Directors consist of:
1. Chairman at the top of the management.
2. Four managing directors.
3. After the managing directors, there are eleven directors.
Four directors are elected under Section 19 (c) of SBI Act, one Director
under Section 19(ca) of SBI Act, one director under Section 19(cb) of SBI
Act, three directors under Section 19(d) of SBI Act, one Director under
Section 19(e) of SBI Act, one Director under Section 19(f) of SBI Act (SBI
Annual report, 2012-13).
3.6 Product and Services by State Bank of India
Various personal banking products offered to the customers by
State Bank of India are:
1. State Bank of India Term Deposits
2. SBI Loan For Pensioners
3. State Bank of India Recurring Deposits
4. Loan Against Mortgage Of Property
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5. State Bank of India Housing Loan
6. Loan Against Shares and Debentures
7. State Bank of India Car Loan
8. Rent Plus Scheme
9. State Bank of India Educational Loan
10. Medi-Plus Scheme
3.6.1 Other Services by State bank of India:
1. Agriculture/Rural Banking
2. NRI Services
3. ATM Services
4. Demat Services
5. Corporate Banking
6. Internet Banking
7. Mobile Banking
8. International Banking
9. Safe Deposit Locker
10. RBIEFT
11. E-Pay
12. E-Rail
13. SBI Vishwa Yatra Foreign Travel Card
14. Broking Services
15. Gift Cheques
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3.7 Real Time Gross Settlement (RTGS) and National Electronic
Fund Transfer System (NEFT)
'RTGS' stands for Real Time Gross Settlement, which can be
defined as the continuous (real-time) settlement of funds transfers
individually on an order by order basis (without netting). Real time
means fund received at time of processing the instruction instead of
receiving the fund at some later time. 'Gross Settlement' means the
settlement of funds transfer instructions occurs individually (on an
instruction by instruction basis). Considering that the funds settlement
takes place in the books of the Reserve Bank of India, the payments are
final and irrevocable (www.rbi.org.in. 2012).RTGS and National
Electronic Fund Transfer system (NEFT) allow individuals, companies
and firms to transfer funds from one bank to another. These facilities
can only be used for transferring money within the country. NEFT
operates on a Deferred Net Settlement (DNS) basis and settles
transactions in batches. The settlement takes place with all transactions
received till a particular cut-off time. In RTGS, transactions are
processed continuously, all through the business hours (www.rbi.org.in
, 2012). State Bank of India offers Real Time Gross Settlement System
(RTGS) and National Electronic Fund Transfer system (NEFT) which
enables the customer an efficient, secure, economical and reliable
State Bank of India and Information Technology: An Interface
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system of transfer of funds from one bank to another bank as well as
from remitter‟s account in a particular bank to the beneficiary‟s account
in another bank all over India .
3.7.1. Real Time Gross System (RTGS)
Real Time Gross System is an electronic payment system in which
payment instructions between banks are processed and settled
individually and continuously on a real time basis, throughout the day.
Customer can transact more than the value of Rs.200000 and above
(www.sbi.co.in .2012).
3.7.2. National Electronic Fund Transfer system (NEFT)
National Electronic Fund transfer System is another electronic
payment system in which payment instructions between banks are
processed and settled on Deferred Net Settlement (DNS) basis at fixed
times during the day. There is no minimum or maximum defined fund
limit for transacting value for using this facility (www.sbi.co.in .2012) .
3.7.3 Important Information Required for Transfer of Funds via RTGS
and NEFT
1. Amount to be remitted from one bank to another .
2. Account number of the recipient, to whom amount is to be
debited.
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3. Name of the beneficiary bank.
4. Name of the beneficiary customer.
5. Account number of the beneficiary customer.
6. Sender to receiver information, if any.
7. Indian financial system code (IFSC) of the receiving branch.
(IFSC is printed on cheque leaves.)
These facilities are available at all State bank of India Core
Banking branches.
3.8 SBI’s Credit Card
State Bank of India is offering its customers various credit cards.
By using these credit cards, customers of SBI can enjoy cashless
transaction. Some of them are discussed below:
3.8.1 SBI Gold Card
By using SBI gold card, customer can enjoy shopping in over 24
million outlets across the globe that includes 325000 outlets in India .
User can use this card at any Visa/MasterCard sign outlet. This card
offers flexibility of payment to the customer. Furthermore, customers
can use this card at any ATM bearing the logo Visa/MasterCard and
online travel tickets can also be booked. SBI Gold card is useful for
State Bank of India and Information Technology: An Interface
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payments of various bills, taxes, fees and a lot more. Draft can be
ordered and utility bills can be paid.
3.8.2 SBI Advantage Plus Card
Post Card issuance, this card provides encash facility and
transfer the fund to SBI to facilitate the opening of Fixed Deposit (FD)
account at the customer‟s name at SBI. Apart from these features this
card entitles the user to enjoy all the benefits enjoyed in SBI Gold
Card. This card is useful for payments of various bills, taxes, fees and
a lot more. Draft can be ordered and utility bills can be paid.
3.8.3 SBI Platinum Card
Apart from the regular benefits of SBI Gold Card and SBI
Advantage card , this card provides the benefit of 2.5 % fuel surcharge
waiver (exclusive of GST, wherever applicable, and all other charges).
In addition to that, the card user earns 5x cash points on dining,
departmental store and international spending.
3.9 SBI’s Debit Card
Customers can enjoy the cashless shopping with State Bank of
India‟s Debit card. Customers can get access to their accounts whenever
and wherever they want. They use this card to purchase goods from
merchants, for making payments online and for withdrawing cash.
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Customers can shop from over 500000 merchant outlets in India.
This debit card can be used for booking movie tickets, bill payments ,
travel and other online payments over internet using „Master secure
code/Verified by Visa‟. This card can be used for withdrawing cash
from State Bank Group ATMs or other ATMs in India. In addition to
that, customers can get instant alerts for all cash transaction/purchase
transaction/online transaction made by debit card via SMS. Daily cash
withdrawal limit is Rs. 40000 and for online payment limit is Rs.50000.
3.9.1 State Bank Silver International Debit Card
Customers can use State Bank Silver International Debit Card to
access their account whenever and wherever they want. Customers can
use it to purchase goods at merchant establishments, for making
payment online and withdraw cash in India as well as across the globe
without any geographical boundary limitation. This can be used at over
500000 merchants in India and over 30 million merchants worldwide.
Further this card can be used for booking movie tickets, making bill
payments, travel and other online purchases and for making payments
over the internet using secure „Master Secure Code/Verified by Visa‟.
This international debit card can be used for withdrawing cash from
any ATM in India and from any ATM abroad(with MasterCard/
Maestro/Visa logo). Daily maximum limit for withdrawing cash is
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Rs.40000 in India and 1000$ abroad. For daily online payment,
maximum transaction limit is 75000 rupees in India and 1500 US$
abroad.
3.9.2 State Bank Gold International Debit Card
Customers of the State Bank Silver International Debit Card can
get access to their account whenever and wherever they want. They can
use it to purchase goods at merchant establishments, for making
payment online and withdraw cash in India as well as across the globe
without any geographical boundary limitation. This international Gold
debit card can be used at over 500000 merchants in India and over 30
million merchants worldwide. Payment for movie tickets, bills, travel
and other online purchase payment or any other payment over the
internet can be made with this ATM card. In addition to that, this card
can be used at any ATM in India or abroad at ATM‟s having the logo
MasterCard/Maestro/Visa. A maximum of Rs. 50000 can be withdrawn
with this gold card in India and 1000$ can be withdrawn abroad daily.
Daily online maximum transaction limit is 200000 rupees in India and
4000 US$ abroad. Along with these features, this card comes with a
insurance (accidental death only) of Rs. 20000. This card also carries a
purchase protection for damage and theft upto 90 days.
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3.9.3 State Bank Platinum International Debit Card
Apart from all the benefits under SBI‟s International Gold card,
this card gives an additional advantage of withdrawing Rs.100000 in
India daily and 2000$ abroad. Along with that, 50000 insurance cover
(accidental death only) and purchase protection for theft/damage upto
90 days is also provided. Daily online maximum transaction limit is
200000 rupees in India and 4000US$ abroad.
3.9.4 SBI Yuva International Card
SBI Yuva Card is an International Debit Card on VISA platform,
specially for youth of India aged between 18-30 years . Customers can
enjoy the convenience of cashless shopping with SBI Yuva International
Debit Card. With SBI Yuva International Debit Card, customers can
access their account whenever and wherever they want. They can use
this card to purchase goods at merchant establishments, for making
payment online and withdraw cash in India as well as across the globe.
This debit card can be used at over 500000 merchants in India and over
30 million merchants worldwide. Payment for movie tickets, bills, travel
and other online purchase payment or any other payment over the
internet can be made with this ATM card. In addition to that, this card
can be used at any ATM in India or abroad at ATM‟s having the Visa
logo. Daily cash withdrawal limit is of Rs. 40000 in India and 1000 US$
State Bank of India and Information Technology: An Interface
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abroad. For online payment, daily transaction limit is 200000 rupees in
India and 4000 US$ abroad. This card provides free insurance cover
(accidental death only) of Rs. 200000 and carries purchase protection for
theft/damage upto 90 days. Along with all these features, this Yuva
card also provide 50% concession on processing charges on loans, 50%
concession on Demat Account charges, 25 point basis concession in
interest rates on housing, vehicle and education to the card holders who
maintain salary/revenue account with SBI.
3.9.5 SBI Business Debit Card
SBI‟s Business Debit Card has been specially designed keeping in
mind business requirements of the Bank‟s Commercial Segment
customers. The Card helps the customer in regular checking and
monitoring business expenses, offering customers greater control over
expenses. Besides having all the features of debit card, this card also
eliminates the need for travellers cheques and exchanging currency
during international trips.
Business card can be classified into two categories; State Bank
Pride and State Bank Premium. Daily cash withdrawal limit with State
Bank Pride is Rs. 100000 and abroad it is the maximum of the foreign
currency equivalent of domestic limit. For e-commerce transaction,
maximum limit is Rs 200000 and abroad, a maximum of the foreign
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currency equivalent of the domestic limit. This card provides free
insurance cover (accidental death only) of Rs. 200000 and carries
purchase protection for theft/damage upto 90 days. While in case of
State Bank Pride, daily cash withdrawal limit is Rs. 200000 and abroad,
a maximum of the foreign currency equivalent of the domestic limit is
allowed. E-commerce limit provided in this card is Rs. 500000 daily and
abroad, a maximum of the foreign currency equivalent of the domestic
limit is allowed. This card provides the card holder free insurance
(accidental death only) of Rs. 500000 and also carries a purchase
protection for theft/damage upto 90 days.
3.9.6 State Bank Networked ATM Services
State Bank of India offer the customers, services of over 26,000
ATMs in India, the largest network in the country. Customers can
transact free of cost at ATM‟s of State Bank‟s group free of cost.
Besides all the debit cards of State bank of India , State bank ATM
accepts following cards:
1. State Bank Credit Card.
2. Cards issued by other banks displaying Maestro, Master Card,
Cirrus, VISA and VISA Electron logos.
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3. All Debit/ Credit Cards issued by any bank outside India
displaying Maestro, Master Card, Cirrus, VISA and VISA
Electron logos.
Features of State Bank of India’s Debit cards
1. Debit card can be used for withdrawing cash.
2. Customer can make the payments for the purchases made by
using the debit card at more than 4 lakh shops, restaurants,
shopping malls, hotels, petrol pumps and many other outlets
which display Maestro logo.
3. Customer can recharge pre-paid mobile phones without any
charges at any State Bank ATM.
4. Payment for MTNL, Mumbai bills through State Bank ATMs
can be made by the customers.
5. Customers in Bengaluru can make Payment of Electricity Bills
(Bescom).
6. Payment of SBI Credit Card bills can be made by the
customers.
7. SBI Life insurance premium can be paid.
8. Customers can pay fees of selected colleges
9. Customers can register SBI Mobile Banking and SMS Alerts .
10. Donation to temple trust can be made by the customers.
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11. Customers can make donation to various relief funds.
12. Fund can be transferred by SBI debit card at State banks
ATM‟s.
13. Customers can change their PIN at State Bank ATM.
14. Customers can book their train, air or bus ticket and make the
payment by this card.
15. At State Bank ATM, customer can get mini statement about
their account by using their ATM cum debit card
16. Online payment can be made to e-commerce websites.
3.10 Internet Banking
Internet banking of State bank of India enables its customers to
operate their accounts from anywhere, anytime irrespective of place
and time, removing the restriction imposed by the geographical
boundaries. Internet banking provides the customer to carry out their
banking activities from their desktop, laptops, smart phone, tablets etc
subject to the availability of power and Internet.
3.10.1 Services Offered under internet banking by State Bank of India
1. Fund transfer can be made by using internet banking. Internet
banking enables the customer to transfer funds within
accounts in the same branch or other branches.
2. Customer can use internet banking to transfer PPF account
across branches.
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3. The Internet Banking application enables the customer to
register demand drafts requests online. Customers can get a
demand draft from any of their accounts (Savings Bank,
Current Account, Cash Credit or OverDraft). Customer can
opt to collect the draft in person at the branch, alternatively,
customer can request the branch to courier it to their
registered address.
4. Customer can make a request for opening up of a new account
via internet banking.
5. With internet banking, customer can request for issue of new
cheque book. Cheque book can be requested for any of the
Savings, Current, Cash Credit, and Over Draft accounts.
Customer can opt for cheque books with 25, 50 or 100 cheque
leaves. They can either collect it from branch or request the
branch to send it by post or courier. Customers can opt to get
the cheque book delivered at their registered address or can be
provided at an alternate address.
6. Customers can book their train, air or bus ticket and make the
payment by using internet banking.
7. Internet banking customers can pay taxes via site to site
integration. Customers can pay their taxes through SBI e-tax.
This facility enables the customer to pay TDS, Income Tax,
State Bank of India and Information Technology: An Interface
119
Indirect Tax, Corporate Tax, Wealth tax, Estate Duty and
Fringe Benefits tax.
8. Internet banking is simple and convenient service for viewing
and paying your bills online. Customer can view and pay
various bills online, directly from SBI account. They can pay
telephone, electricity, insurance, credit cards and other bills
from the comfort of their house or office, 24 hours a day, 365
days a year.
9. Customers can use internet banking to transfer money from
State Bank account to accounts in other banks using the
RTGS/NEFT service. In order to transfer the funds to an
account with other bank, customer should ensure that the
bank branch of the beneficiary is covered under the
RGTS/NEFT payment system.
10. Payment of insurance premium, mobile phone bills and also
purchase of mutual fund units by coming from the biller's
website and selecting State Bank of India in the payment
option by internet banking.
11. With Internet Banking customer can generate an online,
downloadable account statement for any of their accounts for
any date range and for any account mapped to their
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120
username. The statement includes the transaction details,
opening, closing and accumulated balance in the account.
Customer can generate the online account statement for any
date range or for any month and year.
12. Internet banking provides features to enquire status of online
transactions. You can view and verify transaction details and
the current status of transactions.
13. Customer can make the payment of donation to religious and
charitable institution by using Internet Banking of SBI.
14. Internet banking enables the customer to view Demat account
statement and maintain such accounts. The bank acts as their
depository participant. Customer can view Demat account
details and generate the following statements: statement of
holding, statement of transactions, statement of billing.
15. Customers can make fee payment to selected educational
institutions including IITs and NITs.
On the security front, State Bank of India‟s website is „VerySign‟
certified, which indicates that it is very safe and secure for the
customers to use.
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121
3.11 Mobile Banking
Even though if the customer is away from home or office ,
information about their balance in their account can be made available
to them, sending money to their loved ones or payment of bills can be
made anytime anywhere 24x7. This can be possible with the mobile
banking provided by State Bank of India. This service is secure , simple,
can be done anytime and anywhere. State Bank of India‟s mobile
banking is known as State Bank Freedom.
Internet Banking helps the customer's to anytime access to their
banks. They can check out their account details, get their bank
statements, perform transactions like transferring money to other
accounts and pay their bills sitting in the comfort of their homes and
offices. Biggest limitation for using internet banking is “internet
connection”.
However the biggest limitation of Internet banking is the
requirement of a personal computer (PC) or a laptop with an internet
connection, Mobile banking reduces this very limitation of internet
banking, as it reduces the customer requirement to only a cell phone.
Mobile banking is a very beneficial service started by State Bank
of India under the name "State Bank Freedom" which as the name
rightly provides, the convenience and freedom of doing transactions
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122
and transferring money to a desirable location as and when required by
the customer at any time and from any place. It is a safe and convenient
way to access their accounts from their mobile phone.
State bank freedom can be used by the customers in three ways:
3.11.1 SBI’s Mobile Banking Service over Application/ Wireless
Application Protocol (WAP)
The mobile banking service is available on java enabled mobile
phones over SMS/ GPRS where the customer is required to download
the application on their mobile handset. The service can also be availed
via WAP on both java and non java phones with GPRS connection. The
customer can enjoy the following services that are available in the
application based service/ WAP:
a) Customer can transfer fund within the bank or to another
bank by using NEFT.
b) By using this application, customer can check the available
balance in their account and mini statement can also be
generated with it.
c) Cheque book request can be made by the customer by using
this application.
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123
d) Mobile banking application provides Demat Enquiry Service
(Portfolio value, Request for DIS booklet, value of holdings,
statement of charges, Transaction status etc.)
e) Customer can pay bills like utility bills, credit cards, insurance
premium payments.
f) Donations can be made by the customers by using this mobile
banking application
g) Customers can make subscriptions by this application.
h) M-Commerce activities can be made by the customers that
includes mobile top up, top up of Tatasky, BigTV, SunDirect
etc,
i) Customer can get DishTV connections and receive recharge
pins for DigitalTV/Videocon d2h .
j) Merchant payment, SBI life insurance premium can be paid by
this mobile banking application.
Rules for using Mobile Banking Service over Application / WAP.
All the customers of State Bank of India can enjoy the Mobile
Banking Service having Current/ Savings Bank Account (personal
segment). The customers need to register for the services.
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124
Maximum daily transaction limits for fund transfer/ bill/
merchant payment is Rs.50000 per customer with a maximum month
limit of Rs.250000
All customers of State Bank of India can avail this mobile banking
service with the Bank irrespective of the service provider for their
mobiles (Airtel, Reliance, Tata, Vodafone, BSNL, Uninor etc).
Customer only need to bear the cost of SMS or GPRS data usage
for using this service.
3.11.2 Mobile Banking Service over SMS
Mobile banking can be enjoyed by the customers of State bank of
India on all mobile phones, whether these cell phones are java/non java
enabled or with/without GPRS connection. There is no need to
download the application .Customers can enjoy this service by ordinary
SMS.
The customer can enjoy the following services:
a) By using this application, customer can check the available
balance in their account and mini statement can also be
generated with it.
b) Mobile top-up recharges can be done.
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125
c) Direct to Home (DTH) top up/ recharges can be done by the
customers.
d) Mobile to Mobile fund transfer (IMPS) can be done by the
customer by using this service.
e) Mobile pin (MPIN) can be changed by the customers by using
this service.
Rules for using Mobile Banking Service over SMS
Customers of State bank of India having saving and current
account in personal banking segment and current account in SME
segments are available to enjoy this service. Transaction limit is Rs.1000
daily and in a month it is Rs.5000. All the customers can avail this
service irrespective of their service provider. For using this service
customer have to bear only the cost of SMS only.
3.11.3 SBI’s Mobile Banking Service over USSD (Unstructured
Supplementary Service Data)
This method of Mobile Banking Service is now available for all
mobile phones (java/non java) with/without GPRS connection.
Services enjoyed by the customers are as follows:
a) Balance enquiry and mini statement can be checked by the
customers of SBI.
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126
b) Mobile top up recharges can be done by the customers.
c) Customer by using this service can transfer fund from account
to another account of SBI.
Rules for using Mobile Banking Service over USSD
Mobile banking service by USSD is currently available with
selected mobile network providers. All the current /saving account
holder in personal banking segment and only current account holders
of SME segment are eligible to use this service. The service is session
based and requires a response from the user within a reasonable time.
The Daily Transaction limit is Rs.1000 per customer with an overall
calendar monthly limit of Rs. 5000. For using this service, USSD charges
have to be borne by the customers.
3.12 Conclusion
State Bank of India is one of India‟s oldest banks. In this chapter,
details about its history, transformation of SBI, from giving competition
to its private and foreign competitors and to delivering new and
innovating products to its customers has been discussed. In the next
chapter, analysis and interpretation of the questionnaires distributed
among the employees and customers of State bank of India in Aligarh
city is done in order to achieve the objectives and tests the hypotheses
of the study.
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127
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